basics of Goods and service tax

1. BY
PRATHAMESH MUNDHADA
IPCC

2. Existing tax
structure
DIRECT
Income
tax
Wealth
tax
INDIRE
CT
Central
tax
Excise
Service
tax
Custom
State tax
VAT
Luxury
tax,Entr
y tax etc

3. Proposed
tax structure
Direct tax
Income
tax
Wealth
tax
GST
(indirect
tax)
Intra-
state
CGST
(central)
SGST
(state)
Inter-
state
IGST

4.  GST is tax on goods and services
 With value addition at each stage
 Comprehensive and continous chain of set of benefits
from the producer’s/service provider’s point up to the
retailers level
 Only the final consumer should bear the tax

5. Firstly recommended by kelkar task force but the first discussion
paper on GST in india was presented by the Empowered committee
of state finance minister dated Nov 10th , 2009
In 2011 , the constitution ( 115th amendment) bill , 2011 introduced
which lapsed with the dissolution of the 15th lok sabha
Subsequently , in dec 2014 , the constitution ( 122nd amendment)
bill , 2014 was introduced in lok sabha. The bill was passed in
loksabha in may 2015 as well as in rajya sabha on 3rd aug 2016

6.  One country – One tax
 Consumption based tax instead of manufacturing
 Uniform registration, payment and input credit
 Eliminating cascading effect
 Subsume all indirect taxes at centre and state level
 Reduce tax evasion and corruption
 Increase productivity
 Increase tax to GDP ratio and revenue surplus
 Increase compliance
 Reducing economic distortions

7. GST COUNCIL
(a) The union finance minister
(as chairman)
(b) The union minister of state in charge of
revenue or finance
The minister in charge of finance or taxation or
any other minister , nominated by each state
government

8.  List number of taxes , cesses , and surcharges to be
subsumed under GST
 Preparation of list of goods and services subject to or
exempt from GST
 Determination of threshold limit of turnover for
application of GST
 Fixation of rates
 Preparation of GST laws , principles of levy ,
apportionment of tax benefits
 Recommend on compensation to states losing on revenue
post implementation of GST , subject to maximum limit of
5 years

9. CGST
• Replace central excise
and service tax
• Cover sale transaction
• Administered by CG
• Levied on all intrastate
sale of goods and
services
• Credit of only CGST can
be adjusted
SGST
• Replace sales tax , Entry
tax , entertainment tax ,
Luxury tax
• Administered by SG
• Levied on all intrastate
sale of goods and
services
• credit of only SGST can
be adjusted
IGST
• Levied on all inter-state
suplies of goods or
services which are sold
or transfered
• Credit of CGST SGST ,
IGST can be adjusted

10. INDIAN
ECONOMY
Reduce tax
burden
Elimination
of tax
barriers
More
transperancy
Increase
competitive
ness in
foreign
market
Add to govt
revenues
Lowers final
selling price
Increase tax
to GDP ratio

11.  Passing of bill in rajya sabha
 Consent of states
 Revenue neutral rate( RNR )
 Threshold limit in GST
 Robust IT network
 Extensive training to tax administration staff

12.  -Dual goods and servive tax
 -Inter-state transaction and IGST mechanism
 -Destination-based consumption tax
 -Invoice credit method of computation
 -Payment of GST
 -Goods and service tax network( GSTN )
 -Input tax credit ( ITC ) set off
 -GST on imports
 -Maintenance of record
 -Administration
 -GST council

13.  -Dual goods and servive tax
 -Inter-state transaction and IGST mechanism
 -Destination-based consumption tax
 -Invoice credit method of computation
 -Payment of GST
 -Goods and service tax network( GSTN )
 -Input tax credit ( ITC ) set off
 -GST on imports
 -Maintenance of record
 -Administration
 -GST council

14.  -Dual goods and servive tax
 -Inter-state transaction and IGST mechanism
 -Destination-based consumption tax
 -Invoice credit method of computation
 -Payment of GST
 -Goods and service tax network( GSTN )
 -Input tax credit ( ITC ) set off
 -GST on imports
 -Maintenance of record
 -Administration
 -GST council

15. Increase in cost of compliance
Understanding the state and centre
relationship
Increase of inflation in initial years
Unification of goods and services and
removal of distinction between them

16. GST
Transperant
structure
Change
mentality of
tax payer
Reduce tax
evation
Increase in
revenue
Infrastructure
development
ECONOMIC
GROWTH

17.  -Complying the law
 -Should be independent
 -Should be helping govt in implementing good
policies
 -Should be more of business consultants and not
merely as a tax consultant
 -Should have proper and complete knowledge of
GST
 -As GST would be fully automated and on
softwares CA should be having proper knowledge
of how the system works

18. “Its not the end ,
but the start of the journey”
- Arun jaitley

19.  Thank You
 BY PRATHAMESH MUNDHADA
 CA-IPC , MAY 2016
 WRO0570283